Northern Hospital of Surry County has joined the expanding list of North Carolina hospitals that have eliminated jobs in response to reduced revenue levels and federal reimbursement reductions.
Bill James, chief executive of the Mount Airy hospital, said Monday that between 12 and 15 full-time jobs were cut last week. Another 15 to 18 employees had their work weeks reduced to 35 to 36 hours, while another group of employees was shifted into a different job.
“Like most hospitals, we are being affected all across the board in terms of revenue,” James said. “We have had some tough choices to make, but they were necessary to reflect our current financial reality.”
He said critical-care areas were not affected. After the cuts were made, the hospital still has about 625 full-time-equivalent employees.
Hospitals are facing several economic and health care challenges to their bottom lines that include fewer people opting for elective and outpatient procedures; more people opting for high-deductible health plans to lower their premium costs; more people without insurance entering their emergency department for primary and urgent care; and increased regulatory and information technology costs as they implement electronic health records.
Other key factors are reductions in Medicaid and Medicare reimbursements, some prompted by the federal government sequester and changes coming from the Affordable Care Act, and delays related to N.C. Department of Health and Human Services’ problems with its NC Tracks Medicaid payment-processing system.
James projected that the hospital would lose about $1.3 million in payments during fiscal 2013-14, which began Oct. 1. Medicaid and Medicare recipients represent two-thirds of Northern Hospital’s patients, he said.
Northern Hospital, like many Triad hospitals, has made significant infrastructure expansions in recent years to prepare for baby boomers needing more services as they enter their retirement years, and for the projected state expansion of Medicaid that was not approved by the General Assembly.
Northern Hospital spent $22 million in the past five years to more than double its space for operating rooms and outpatient care.
“It’s easy to be criticized for over-expanding, but that’s what hospitals were told to do to handle an aging demographic, James said. “We all have to adjust to reduced patient care demands.
Several Triad-based health care systems have announced the elimination of hundreds of job positions in the past year in response to reduced revenue from core services. They include Cone Health (at least 300), Novant Health Inc. (at least 289) and Wake Forest Baptist Medical Center (at least 950).
Cape Fear Valley Health System in Fayetteville said Sept. 27 that federal budget cuts it faces are behind the decision to cut 118 jobs, including 99 vacancies, from its workforce. Randolph Hospital in Asheboro eliminated 66 jobs earlier this month.